Farmers in the US agricultural heartland that helped elect Donald Trump are now pushing his administration to avoid a trade dispute with Mexico, fearing retaliatory tariffs that could hit over $3 billion in US exports.
The value of exports at risk is based on a Reuters analysis of a tariff list which Mexico used in a trucking dispute six years ago and which Mexican officials have said could serve as a model if President Trump sets new barriers to Mexican goods.
Pork producers contacted Trump’s transition team soon after the November 8 election to stress that tariff-free access to Mexico has made it their top export market by volume, said John Weber, president of the National Pork Producers Council.
The council has sent the administration multiple letters, including one signed in January by 133 agricultural organisations, and is arranging for several hog farmers to fly to Washington next month to talk to officials.
“We just keep pounding them on how critical trade is to us,” said Weber.
The tariffs would apply to over $800 million of annual pork exports, according to data compiled by IHS Markit’s Global Trade Atlas.
The lobbying effort by US businesses which rely on the Mexican market shows how Mexico can press its case in Washington despite having an economy 1/17 the size of America’s and relying on the US market for nearly 80 per cent if its exports.
In Iowa, where pigs outnumber people seven to one, hog and grain farmer Jamie Schmidt voted for Trump in part on his promise to cut regulatory burdens for businesses.
Now he and others who farm the flat, rich land around Garner, Iowa, worry about trade. Schmidt gets about half of his income from hogs, earning $4-5 for each of the 425 pigs he sells per week.
Tariffs from Mexico could depress US wholesale prices and wipe out his profits, Schmidt said. “It would be devastating.”
In December, after fears of a trade dispute fuelled a deep peso slump, Mexico started mapping out US states that are most reliant on its market, replicating the strategy it used in the trucking dispute, said two senior Mexican officials.
The country’s foreign minister said last month tariffs could target Iowa, which raises a third of US hogs and exports about a quarter of its pork production, $100 million of which went to Mexico last year.
The minister also said tariffs could aim at Wisconsin, the centre of US cheese production, and has singled out Texas for its “notable” trade surplus with Mexico.